government procurement reform act (rep. act 9184)

Government Procurement Reform Act (Rep. Act 9184)

“Not just doing the right things, but doing it right”

PROBLEM AREAS AND REFORM MEASURES

PROBLEMS REFORMS

• Confusion caused by fragmented legal system

Uniform applicability of the law to both national government agencies and local government units

ENACTMENT OF GPRA

Implementing Implementing Rules and Rules and RegulationsRegulations

Executive OrdersExecutive Orders Administrative Administrative IssuancesIssuances

Memorandum Memorandum CircularsCirculars

over 100 procurement rules & regulationsover 100 procurement rules & regulations

R.A. 9184R.A. 918410 January 200310 January 2003

Goods, Infrastructure,Goods, Infrastructure,Consulting ServicesConsulting ServicesCoverage: NGAs and LGUsCoverage: NGAs and LGUs

PROBLEM AREAS AND REFORM MEASURES

PROBLEMS REFORMS

• Confusion caused by inconsistent rules and regulations

• Creation of the Government Procurement Policy Board (GPPB) as sole procurement authority• Inconsistent policies,

rules, and regulations due to lack of standards

• Outdated procurement rules and regulations

CREATION OF GPPB

Inter-Agency Body

Big procuring entities (defense, education, health, public works, transportation and communications)

Oversight agencies (budget, planning,

finance, trade, science and technology, interior and local government, energy)

Private Sector

Resource Persons (audit, anti-corruption agencies)

GPPB Functions Policy-Making

Amend implementing rules & regulations of procurement law (quasi-legislative function)

Prepare generic procurement manual and standard bidding forms

Capacity Development Establish a sustainable training program

Monitoring Assist procuring entities improve their

compliance Review effectiveness of procurement law

PROBLEM AREAS AND REFORM MEASURES

PROBLEMS REFORMS

Collusion and lack of transparency

Approved Budget for the Contract as ceiling for bid prices

Delays, collusion, and lack of competition

Simplification of Pre-qualification and stronger post-qualification

Abuse of discretion Use of objective non-discretionary criteria

PROBLEM AREAS AND REFORM MEASURES

PROBLEMS REFORMS

• Lack of transparency Use of Electronic Procurement

www.philgeps.net

PROBLEM AREAS AND REFORM MEASURES

PROBLEMS REFORMS

• Lack of checks and balance

Civil society organization observance of bidding process and result reporting

GOVERNING PRINCIPLES Transparency

◦ Wider dissemination of bid opportunities

Competitiveness◦ Equal opportunity to all eligible bidders

Streamlined Process◦ Uniformly applicable to all government agencies◦ Effective and efficient method

System of Accountability◦ “Answerable”

Public Monitoring◦ Awareness and vigilance

R.A. 9184 applies to all branches and/or instrumentalities of the government:

a) National Government Agencies (NGAs) b) State Universities and Colleges (SUCs)c) Government Owned or Controlled Corporations

(GOCCs)d) Government Financial Institutions (GFIs)e) Local Government Units (LGUs)

COVERAGE

SCOPE AND APPLICATION

R.A. 9184 governs the procurement of: Goods (Supplies & General Support Services) Infrastructure Projects Consulting Services

All domestically-funded procurement activities

All foreign-funded procurement activities, unless otherwise stated in the treaty or international or executive agreement

SCOPE AND APPLICATION

Exceptions:

Procurement funded from Foreign Grants [R.A. 8182, as amended by R.A. 8555 (ODA Law)];

Acquisition of Real Property (R.A. 8974);

Public-Private Sector Infrastructure or Development Projects [R.A. 6957, as amended by R.A. 7718 (BOT Law)];

Disposal of government properties (rules on budget, accounting and audit)

JV Partnerships (NEDA Guidelines)

DEFINITION (GOODS)

Items, supplies, materials & general support services, except consulting services & infra projects, which may be needed in the transaction of public businesses or in the pursuit of any government undertaking. Includes, but is not limited to the following:a)equipment, b)furniture, c)stationery, d)materials for construction, e)personal property of any kind,f)non-personal or contractual services, i.repair & maintenance of equipment and furniture ii.trucking, hauling, and courieriii.janitorial, security and manpower

Related or analogous services shall include, but not limited to the following:

a)lease or purchase of office space

b)media advertisements

c)health maintenance services

d)other services essential to the operation of the procuring entity

i.rental of venues and facilities

ii.catering services

iii.lease of computers, copiers and other information technology equipment

DEFINITION (GOODS)

DEFINITION (INFRASTRUCTURE PROJECTS)

Include

• Construction• Improvement• Rehabilitation• Demolition• Repair• Restoration• Maintenance

• Roads and bridges• Railways• Airports and seaports• Communication facilities• Civil works components of IT projects• Irrigation• Flood control and drainage• Water supply• Sanitation• Sewerage and solid waste management

systems• Shore protection• Energy/power and electrification

facilities• Buildings (National, School, Hospital)• Other related construction projects

Services for infrastructure projects and other types of projects or activities requiring adequate external technical and professional expertise that are beyond the capability and/or capacity of the GOP, such as:

a)Advisory and review services

b)Pre-investment or feasibility studies

c)Design

d)Construction supervision

e)Management and related services

f)Other technical services or special studies

DEFINITION (CONSULTING SERVICES)

Head of the Head of the Procuring EntityProcuring Entity

BACBAC

TWGTWGObserversObservers

BAC SecretariatBAC Secretariat

PROCUREMENT ORGANIZATIONAL STRUCTURE

Head of the Procuring Entity (HOPE)

Establish BAC and appoint its members◦ Ensure BAC members give utmost priority to

assignments◦ Ensure professionalization of procurement

organization

Approve the Annual Procurement Plan (APP) & Procurement Monitoring Report

Promptly act on BAC recommendations, i.e., award of the contract and mode of procurement

Approve/Disapprove Contract Award

Resolve Protests

PROCUREMENT ORGANIZATION

Head of the Procuring Entity (HOPE)

Ensure that the procurement officials and personnel receive ample training and proper incentives

Impose the necessary administrative sanctions to errant procurement officials and bidders – issues blacklisting orders

In case of consulting services, approves the method of evaluation, short-listed bidders and bidder having the Highest Rated Bid.

PROCUREMENT ORGANIZATION

Bids and Awards Committee

General Rule: Single BAC

Exception: Expedite the procurement process for practical intents and purposes where the number and complexity of the items to be procured warrants

HOPE designates the BAC members, including the Chair and Vice-Chair

PROCUREMENT ORGANIZATION

Bids and Awards Committee

Composition: FIVE (5) but not more than SEVEN (7) MEMBERS designated by the HOPE

Members of the local sanggunian.

PROCUREMENT ORGANIZATION

Bids and Awards CommitteeMajor Functions:

Recommend Procurement Method

Create TWG

Conduct the bidding activities

Resolve Requests for Reconsideration

Prepares the APP and PMR

Recommend Imposition of Sanctions vis-à-vis process blacklisting proceedings

PROCUREMENT ORGANIZATION

Bids and Awards CommitteeOther Responsibilities:

Invite Observers during all stages of the procurement process

Conduct due diligence review or verifications of the qualifications of observers

Prepare Procurement Monitoring Report

Suspend or blacklist bidders

PROCUREMENT ORGANIZATION

Bids and Awards Committee

Prohibited Members:

Head of the Procuring Entity

Approving Authority

Chief Accountant (Head of the Provincial/City/Municipal Accounting Office) and his/her staff, unless any of the former were designated as end-user of the project (COA Circular 2003-04)

PROCUREMENT ORGANIZATION

Technical Working Group

Created by the BAC from a pool of legal, technical and financial experts

Functions:

Assist BAC in the following activities:• Preparing bidding documents• Eligibility check/short-listing• Bid evaluation and preparation of reports• Post-qualification • Preparation of post-qualification summary report

Assist BAC and BAC Secretariat in preparing BAC Resolutions

PROCUREMENT ORGANIZATION

BAC Secretariat

HOPE may create a new office or designate an existing organic office to act as BAC Secretariat

Functions:

Provide administrative support to the BAC

Organize BAC meetings and conferences

Take custody of procurement documents and other records

Manage the sale and distribution of bidding documents

PROCUREMENT ORGANIZATION

BAC Secretariat

Functions:

Advertise/post bidding opportunities and notices of awards

Assist in managing the procurement process

Monitor procurement activities and milestones

Consolidate PPMPs

Act as central channel of communications

PROCUREMENT ORGANIZATION

Who are the Observers? Representative from COA Representative from a duly recognized private

group in a relevant sector or discipline Representative from an NGO

Qualifications: Organization duly registered with the SEC or CDA With knowledge, experience or expertise in

procurement or in the subject matter of the contract to be bid

Without actual or potential conflict of interest in the contract to be bid

Any other relevant criteria that may be determined by the BAC

OBSERVERS

Invited at least 3 cd prior to the procurement stage/activity to enhance transparency of the process

Responsibilities: Prepare report (jointly or separately) indicating

their observations on the procurement activities Submit report to the PE and furnish a copy to the

GPPB and the Office of the Ombudsman/Resident Ombudsman

Immediately inhibit and notify in writing the PE of any actual or potential conflict of interest

Allowed access to documents upon signing of a confidentiality agreement

OBSERVERS

Honoraria

Legal Basis: DBM Budget Circular 2007-3, dated 20

November 2007 DBM Budget Circular 2004-5A, dated 7 October

2005

Paid only for successfully completed procurement projects

Procurement contract has been awarded Applies every procurement project that has been

identified, described, detailed, scheduled and budgeted in the APP

Limited to procurement that involves competitive bidding

BAC INCENTIVES

Honoraria: Ceiling

BAC Chair Php. 3,000

BAC Members 2,500

TWG Chair & Members 2,000

Average amount of honoraria per month over one year should not exceed 25% of the basic monthly salary

BAC INCENTIVES

Honoraria: Funding Source:

Collections from successfully completed project

• proceeds from sale of bid documents• fees from contractor/supplier registry • fees charged for copies of:

1. minutes of bid openings, 2. BAC resolutions, and 3. other BAC documents

• Protest fees• Proceeds from bid security forfeiture

• Savings from the DBM approved corporate operating budget

BAC INCENTIVES

Honoraria: BAC Secretariat Ad hoc: paid honoraria at the same rate as the TWG

chair and members Procurement Unit: Overtime services

Those who are receiving honoraria shall no longer be entitled to overtime pay

Administrative staff, such as clerks, messengers and drivers supporting the BAC, the TWG and the Secretariat entitled to payment of overtime services

BAC INCENTIVES

PHILIPPINE PROCUREMENT PARADIGM

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NEEDSSATISFACTION

End UserEnd User

BACBAC

BAC SecBAC Sec

HOPEHOPE

Identify

Assess Procure

Implement

BACBAC

TWGTWG

HOPEHOPE

End UserEnd User

BAC SecBAC Sec

• Cost-benefit analysis• Feasibility study• Market study• PPMP

• Review studies• Consolidate into APP• Decide procurement

method• Approve APP• Determine readiness

• Post/Advertise opportunity

• Open and evaluate bids

• Post-qualify• Award and enter into

contract

• Oversee implementation

• Inspect and accept deliveries

• Release payment

Budget Budget

Procurement planning involves resource allocation and scheduling.

Involves identifying which project/program/activity needs of the procuring entity can best be met by procuring products or services. It includes deciding:

Whether to procure

What to procure

How to procure

Where to procure

How much to procure

When to procure

PROCUREMENT PLANNING

Why Conduct Procurement Planning?

Overall goal of the particular project will be effectively and efficiently achieved

Precludes occasions for unnecessary government purchases and circumventions of the prescribed procurement procedures.

Examples: Advance deliveries; Suki” system, or Unwarranted resort to alternative methods

procurement.

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PROCUREMENT PLANNING

Why Conduct Procurement Planning?

Done w/in budgetary context reflecting the LGU’s priorities and objectives for the budget period.

Government has the fiduciary responsibility to protect the taxpayers’ interests and safeguard the resources allotted to each department

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PROCUREMENT PLANNING

The following competencies are required:

knowledge of the items to be procured accounting, warranty and contract laws, and scheduling.

PROCUREMENT PLANNING

All procurement shall be within the approved budget of the procuring entity and should be meticulously and judiciously planned by procuring entity

Only those considered crucial to the efficient discharge of governmental functions shall be included in the Annual Procurement Plan (APP).

A procurement project shall be considered crucial to the efficient discharge of governmental functions if it is required for the day-to-day operations or is in pursuit of the principal mandate of the procuring entity concerned.(Sec. 7.1, Revised IRR)

No procurement shall be undertaken unless it is in accordance with the approved APP (Sec. 7.1, Revised IRR)

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PROCUREMENT PLANNING

What is a PPMP?

PPMP is the document reflecting the different programs, activities and projects (PAPs) of the various end-user units or Project Management Offices (PMOs) of the procuring entity.

When is the PPMP prepared?

PPMP is prepared simultaneously with the budget proposal to provide details on the mode and schedule of procurement, technical description and specification of goods, equipment and civil works to be procured and their proposed budgets.

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PROJECT PROCUREMENT MANAGEMENT PLAN

Who prepares the PPMP?

The end-user units or the Project Management Office (PMO) shall prepare their respective PPMP for their PAPs.

Why is the PPMP prepared?

PPMP is an important factor in determining and projecting the quantity and quality of the expected outputs of the PAPs.

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PROJECT PROCUREMENT MANAGEMENT PLAN

Factors to consider in preparing the PPMP?

o Assess the Needs

Strategize procurement of Needs

Consolidate identified Needs

Review studies and justifications for the Needs

Ascertain reasonableness of Needs

Prioritize acquisition of Needs44

PROJECT PROCUREMENT MANAGEMENT PLAN

Project Procurement Management Plan

Name of the Project or Procurement

General Description of the Project

Extent/Size of Contract Scopes/Packages

Procurement Method

Time Schedule / Procurement Milestones

Estimated Budget for the Contract

Con

tent

s

PROJECT PROCUREMENT MANAGEMENT PLAN

What is an APP?

APP is the document that consolidates the various PPMPs submitted by the various procuring entity’s end-user units/PMOs.

Who prepares the APP?

APP is prepared by the BAC, through the BAC Secretariat

Who approves the APP?

APP should be approved by the HOPE or its duly authorized 2nd ranking official

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ANNUAL PROCUREMENT PLAN

How is the APP prepared & maintained?

APP should be maintained and updated regularly

In the consolidation of PPMPs, the BAC may adopt a strategy through which similar items of procurement are packaged into one procurement undertaking and under a single PPMP, in which the original PPMPs shall be consolidated and revised.

A review and updating of the individual PPMPs and the APP shall be done regularly, at least once every 6 mos. or as often as necessary;

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ANNUAL PROCUREMENT PLAN

Factors to consider in developing an APP?

Inclusion of all procurement activities planned for the year;

Include provisions for a lump sum to cover foreseeable emergencies or contingencies usually indicated by historical records;

Scheduling of procurement activities in the APP should be done in such a manner that the BAC and the other offices/units involved in the procurement process in the procuring entity are able to efficiently manage the conduct of procurement transactions.

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ANNUAL PROCUREMENT PLAN

PROCUREMENT PLANNING

End UserBudget Office

BAC Sec / BAC

Approving Authority

1Prepare PPMP

Evaluate PPMP and include in

budget proposal

Review and consolidate

into APP

Approve GAA/

Corporate Budget/

Ordinance

2 Revise PPMPFinalize

procurement mode

HOPE or 2nd in rank

approves APP

Annual Procurement Plan

Name of the Project

General Description of the Project

Procurement Method

Time Schedule of each Procurement Activity

Approved Budget for the Contract (ABC)

Con

tent

s

PMO or End-user Unit

ANNUAL PROCUREMENT PLAN

In preparing the APP, use the GPPB prescribed format

Post a copy of the APP in the PE’s website and the On-Line Monitoring Evaluation System (OMES) in the GPPB website

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PROCUREMENT PLANNING

What is a PMR?

PMR is the document that reflects all of the procurement activities undertaken by the procuring entity, whether completed or on-going

Who prepares the PMR?

PMR is prepared by the BAC, through the BAC Secretariat

Who approves the APP?

PMR shall be approved by the HOPE & submitted to the GPPB.

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PROCUREMENT MONITORING

What does the PMR cover?

PMR shall cover all procurement activities specified in the APP, whether on-going and completed from holding of the pre-procurement conference to the issuance of the notice of award and approval of the contract, including the actual time for each major procurement activity.

When will the PMR be submitted?

After HOPE approval, the PMR shall be submitted to the GPPB in printed & electronic format w/in 14 cd after the end of each semester.

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PROCUREMENT MONITORING

Why is the PMR prepared?

Monitoring entails tracking of inputs, activities, outputs, and outcomes of the procurement activity

It monitors the results of current operations on a regular basis.

Ex-post evaluation examines the project outcomes and impacts. It is a determination of the benefits derived from the project, the attainment of specific targets for key indicators, and the sustainability of the project.

BAC shall ensure that the procuring entity abides by the standards set forth under R.A. 9184 and its IRR.

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PROCUREMENT MONITORING